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A fine mess in Brazil (and Houston)

Tom Fox | July 25, 2018

A very odd set of facts recently came out of a recent legal dispute between Vantage Drilling, a Houston-based drilling contractor, and Brazil’s state-owned oil company Petrobras.

Vantage Drilling successfully pursued a $622 million breach-of-contract claim against Petrobras for its failure to pay Vantage for services delivered. The award was made in a private arbitration, the preferred mechanism for settling such international commercial disputes.

Petrobras had claimed it had not paid Vantage because of material operational failures. Petrobras defenses at the arbitration stage did not succeed. Nor did its counter-claims against Vantage. 

However, after it lost the arbitration award, Petrobras claimed the contract under which Vantage had performed the work, and under which Vantage prevailed at arbitration, was procured through corruption and, therefore, void. Vantage responded that the Justice Department had given it a pass on any Foreign Corrupt Practices Act...

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